The 25 basis cut in the repo rate is a welcoming step by RBI. More so,the 75 basis points cut in the marginal standing facility (MSF) iseven a more important announcement by the governor. The most excitingpart of this announcement was governor making the comment that the RBI will push banks to actually cut the rates on lending for homeloans and automobiles loans.

On December 1, 2015 the Fifth Bi-monthly RBI Monetary Policy Statement, 2015-16 was announced by Dr. Raghuram G. Rajan, Governor, Reserve Bank of India. With regard to the Monetary and Liquidity measures, on the basis of an assessment of the current and evolving macroeconomic situation, RBI has decided to: 1) Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.75 per cent.